Position Update in Edwards Life Sciences

I have received several inquiries on where this position stands so I thought I would do a quick post.

On Tuesday, October 9, $EW put out a warning on their upcoming earnings due to Europe (and other issues). The stock quickly gapped down in a big way and I began to build a new long position. Here is a summary:

  • L 1/3 pos at 93.98 in after hours
  • L 1/3 pos at 90 in after hours
  • StO the October 85 Put the following day at 1.80 (1/3 pos)
  • StO the October 85 Put on October 10 at 3.15 (1/4 pos)

Hmmm. Wait just a minute. That equals more than 100%. I elected to sell some additional Puts on the final big down push on Wednesday this week – which is a rule violation on position size but liked the premium that I could collect. One additional step I took yesterday was to sell Calls against the existing long stock position for October:

  • StO the October 90 Call for 1.60 on October 10 (2/3 pos)

The price is currently hovering near $87 a share and due to the Put sales I am up slightly on the overall position. I was a little early on the stock entries out of the gate, but like where things stand going into October expiration.

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